What is the High Income Child Benefit Charge?

What is the High Income Child Benefit Charge?

Introduced in January 2013, the High Income Child Benefit Charge is a levy assigned to households who claim Child Benefit and whose annual income is above £50,000.

The rate at which the charge is levied depends on the income of the claimant or their partner. For those on an income of between £50,000 and £60,000, the charge is less than the annual benefit payments.

After £60,000, however, the charge is 100 per cent of the amount of Child Benefit.

Why claim Child Benefit only to repay it later?

While it may seem illogical to receive the benefit if you or your partner earns above the revenue threshold, registering for Child Benefit enables non-working parents to protect their entitlement to the full State Pension.

This is because Child Benefit essentially replaces National Insurance credits when a parent is looking after a child and is not in paid employment.

It is therefore advised to continue claiming the benefit if you or your partner is not in work. In some circumstances, it is also possible to claim Child Benefit for a child who does not live with you, providing you contribute to the cost of providing for the child an amount equal to or greater than the weekly Child Benefit payment.

If you do decide to claim Child Benefit, you must pay the charge each year, declaring it on your annual Self Assessment tax return. The charge can be collected through the Pay As You Earn (PAYE) system or as a lump sum payment.

Note, you must first register for Self Assessment before you can file a tax return and the charge is always paid by the partner with the higher income.

How the charge is calculated:

The High Income Child Benefit Charge is calculated at a rate of one per cent of the full child benefit award for each £100 of income between £50,000 and £60,000.

For example, if you earn £54,000 per year and receive Child Benefit of £1,789 per year, the charge will amount to £708.

You can use this calculator to work out how much you have to pay. Alternatively, click here to learn more about the High Income Child Benefit Charge.